On December 1, 2025, Beijing, China - Recently, the organic silicon industry has undergone a deep adjustment in the supply and demand pattern under the consensus of "anti involution", with a significant trend of price rebound and increasingly clear signals of industry bottom reversal. According to multiple media reports, on November 18th, mainstream silicone monomer factories in China held an industry conference and reached a consensus to reduce production and maintain prices. They plan to maintain a long-term operating rate of around 70% and dynamically adjust the emission reduction ratio through the establishment of a special working group. As of November 21st, the market price of organic silicon DMC (dimethyl cyclic siloxane mixture) in East China has risen to 13200 yuan/ton, an increase of 20% from the beginning of the month. Industry inventory has dropped to a low of 44000 tons, and the expectation of supply contraction has been strengthened.


International giants raise prices, highlighting industry synergies
On November 25th, Dow Chemical, the global leader in organic silicon, announced to its partners in Greater China that it would raise prices for its Xiameter business line's main products by 10% -20% starting from December 10th, covering core products such as dimethyl silicone oil, 107 glue, and raw rubber. This price adjustment is seen as a landmark event for the improvement of supply and demand in the global silicone market. At the same time, leading domestic enterprises such as Xingfa Group and Hesheng Silicon Industry have also raised their prices, forming a price increase pattern of "internal and external linkage". According to data from Baichuan Yingfu, the apparent consumption of organic silicon in China reached 1.62 million tons in the first three quarters of 2025, a year-on-year increase of 5.5%. The annual consumption is expected to exceed 2.1 million tons, while the production is only 2.55 million tons. The supply-demand gap may further expand in the first half of 2026.


Production capacity clearance accelerates, leading advantage consolidated
On the supply side, the domestic silicone industry has entered a period of capacity contraction. By the end of 2024, China's production capacity of organic silicon intermediates will reach 3.44 million tons, but no new devices will be put into operation in 2025. In addition, the "Organic Silicon Industry Standard Conditions (2025 Edition)" will increase the entry threshold for individual projects from 200000 tons to 300000 tons per year, accelerating the elimination of small production capacity. Overseas, Dow Chemical plans to shut down 145000 tons of production capacity in the UK by 2027, and the imposition of EU carbon tariffs may lead to the closure of 330000 tons of production capacity in Europe by Wacker and Elkem, resulting in a continued optimization of the global supply landscape. In this context, leading companies such as Hesheng Silicon Industry and Xingfa Group have further increased their market share by leveraging their full industry chain layout and scale advantages. Among them, the production capacity of organic silicon monomers in Hesheng Silicon Industry reached 1.73 million tons per year, ranking among the top three in the world; Hubei Xingrui, a wholly-owned subsidiary of Xingfa Group, has a single production capacity of 360000 tons per year and downstream supporting deep processing products such as silicone rubber and sealant, with a terminal conversion rate of over 45%.


Institutions are optimistic about the future market, and industry valuations are expected to reshape
Everbright Securities pointed out that the current expansion cycle of the organic silicon industry is coming to an end, and the steady growth of apparent consumption has laid the foundation for demand. The slowdown in new production capacity will alleviate supply pressure, and the industry pattern is developing positively. According to calculations by Guotou Securities, the effective production capacity of domestic organic silicon intermediates in 2025 will be 3.35 million tons per year, unchanged from 2024. Under the pressure of industry profitability, enterprises are cautious in expanding production and have sufficient price elasticity. In terms of the capital market, as of November 28th, the cumulative increase of the organic silicon concept sector for the year reached 69.08%. Several stocks such as Chengguang New Materials and Hongbai New Materials have hit the daily limit multiple times, indicating strong expectations of the industry's recovery from the financial downturn. Analysts believe that leading companies with cost advantages and production capacity are expected to achieve a "Davis double click" between performance and stock price in this round of price increases.